PACRA Maintains Asset Manager Rating of ABL Asset Management Company Limited
|Rating Type||Asset Manager|
The assigned rating of ABL Asset Management Company Limited ("ABL AMC" or the "Company") incorporates the Company's i) elevating market positioning, ii) satisfactory fund performance, iii) digital penetration, and iv) strong equity profile. The association of the Company with a well-established bank, which is one of the dominant players in the banking sector, bodes
well for the ratings. Since Jun'22, the overall industry has shown growth by ~28%, while the AMC has shown a growth of ~16% with a market share of ~7%. While as of end Sep'23 the AUMs were reported at PKR 130bln. The AMC is making efforts to strengthen its relative positioning by taking measures i) continuously introducing new products in line with the industry demand, especially Islamic Products 2) Enhancing retail penetration through opening more saving centers and 3) focusing on the growth of distributor networks in underserved areas.
The investor's concentration at the AMC level is comfortably low at 43%. The Fund slate of the AMC is well diversified however, the AMC has plans to launch further funds in near future. The Company has an adequate retail customer base, while the management is aggressively focusing on strengthening its digital platforms for better retail penetration, distribution network, and customer services. Continued focus on retail expansion and enhanced delivery channels is also taken into consideration. The rating of the Company also takes into account an experienced management team, sound governance framework, and adequate investment decision-making process. The ABL AMC has a well-established risk management framework and compliance protocols. Materialization of digital initiatives in terms of enhanced retail growth and market share is critical. In order to strengthen its product slate, the Company is also operating under advisory services with a healthy SMA portfolio. On the financial profile side, during FY23, the Company’s net profit increased to PKR 193.4mln (6MFY22: PKR 53.7mln). The Company enjoys sound liquidity and has a sufficient equity base of PKR 3.03bln as of Jun'23, which is well above the peer's universe.
The rating is dependent on the management's ability to effectively execute business development plans and leveraging its digital initiatives to strengthen its operations and outreach. Sustaining consistency in terms of fund's performance to remain in top quartile, and regaining of profitability would remain imperative. The retention of key management personnel, sound corporate governance and further strengthening investment process remains key rating factors.
Incorporated in 2007, ABL AMC is a wholly owned subsidiary of Allied Bank Limited (ABL). ABL operates with 1,400 plus branches including 117 Islamic banking branches, 8 Digital/ Self Service branches & 2 overseas branches. ABL AMC possesses licenses for asset management, pension management and investment advisory services. As the leading private sector asset
management and investment advisory Company in Pakistan, offerings include a comprehensive range of both Conventional and Shariah Compliant investment solutions across all major asset classes.